Those currently shopping for auto insurance are finding themselves in a good position. According to recent data from Insurance.com, rates are at 2 year lows.
“This is great news for the growing number of savvy drivers shopping and comparing car insurance quotes,” says Rob Klapper, CEO, insurance.com. “They know there is always a chance to save big because rates constantly change for various reasons – from events in the driver’s personal life, like buying a home or having a birthday, to fluctuations in the insurance market.”
Average annual auto insurance rates dropped from $1,798 in May 2010 as compared to $1,871 in May 2009. But part of the reason for the drop in rates is due to drivers only buying the bare minimum coverage required by their state’s auto insurance laws.
“We’re seeing more and more drivers choosing minimum coverage or liability-only coverage when they shop and compare quotes,” says Klapper. “It makes sense, since many people are on tight budgets in this down economy and car insurance is one of the easiest places to save money. But, inevitably, this trend only adds to a growing group of underinsured drivers on the road.”
Drivers electing only the required minimum level of coverage could face serious out-of-pocket expenses if they end up in a wreck. Especially if they have any means, they could be personally accountable for any damages over and above their policy limits.
It is additionally recommended that drivers purchase uninsured/underinsured motorist coverage. Such coverage will pay for damages caused by a driver that is either uninsured or lacks sufficient coverage. “If you get in an accident and the other driver doesn’t have insurance or doesn’t have enough of it, you want to know you’ll be made financially whole again,” says Klapper. “This type of coverage is inexpensive and will pay your medical bills, lost wages and more. So make sure you and your passengers are protected fiscally and physically.”